Welsh Government’s current position on tourism levies in Wales

7 March 2018

Dear Peter

I’m writing from Welsh Treasury in the Welsh Government. I’m writing with interest in your recent article related to the recent announcement by the Liverpool City Region proposing the introduction of a tourism levy on a trial basis.

We thought you might be interested in recent activities in Wales on new taxes. In July 2017 the Cabinet Secretary for Finance led a debate on new tax powers in Wales, where Welsh citizens were invited to comment on new taxes. Following the debate, the Cabinet Secretary for Finance announced four tax ideas that the Welsh Government would develop further – a vacant land tax, a social care levy, a disposable plastics tax and a tourism tax.

The reason for exploring a potential tourism tax for Wales is to help find ways of investing in tourism – to raise revenue to support and improve the tourism offer in Wales. The UK context is continually developing, as more cities in the UK are actively considering introducing a tourism tax, with many international cities having also successfully introduced different forms of a tourism tax. We are, however, aware of the issues around the potential impact of such a tax on the tourism industry in Wales and have been listening to and will continue to hear the views of stakeholders on such matters.

While the vacant land tax proposal has been prioritised to test the Wales Act powers, work will continue, at varying levels, on the remaining three tax ideas. For the tourism tax specifically – the Welsh Government will explore ways in which local authorities could be given permissive powers to develop and implement a local tourism tax. There are significant policy issues which require further exploration and consideration before any local permissive powers could be introduced, including, but not limited to, the overall level of taxation on the tourism sector – in particular VAT. This will consequently be a longer term, deliberative piece of work to be carried out over the coming years, and in collaboration with local government, the industry and other interested parties.

I attach the associated press articles and a link to our new taxes webpages for your information. I noticed that you have you have a link to articles on various recent tourism tax/levy proposals and thought this may be of interest and possibly a suitable addition.